Do I hold a prohibited investment?

For registered plans, a prohibited investment is generally an investment to which you are closely connected. Examples include:

  • Shares of a company, trust, or partnership in which you have a significant interest (10% or more).
  • Shares of a company, trust, or partnership with which you do not deal at arm’s length.
  • Non-arm’s length mortgages.

Prohibited investments are subject to two special taxes:

  • 50% tax on the value of the investment, which is refundable in certain cases.
  • 100% tax on any income or capital gains from the investment.

It is your responsibility to ensure that the investments you hold are not prohibited investments. However, Olympia will not knowingly facilitate the acquisition or holding of prohibited investments.

For more information on prohibited investments, please refer to CRA Income Tax Folio S3-F10-C2.

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